05/08/2016 BBC Business Live

Hello, this is business live. The road to Rio has been fraught with

doping scandals and political and economic crises and of course the

Zika scare but it is set to be the biggest money games in history. That

is our top story. Business bets big on Brazil, we will

hear from the big boss Nissan on why spending millions of dollars on

sponsoring these games was the right move. Also, if you build it, they

will come. One retirement home in London has dug a tunnel to Harrods

with all the elements. And a quick with all the elements. And a quick

look at the markets, you can see they are up. As well as the big move

of the Bank of England yesterday. And two months after the Europeans

at the bank started buying corporate bonds, the Bank of England adopts a

similar strategy. We will be assessing whether this really

tackles the underlying causes of lacklustre growth. Mark Carney is

throwing everything but the kitchen sink at the economic future he

clearly sees as risky so we want to know if it is as bad as all that or

are there any positive benefit from the decision to leave the EU.

Welcome to the programme, a lot going on, we have that Friday

feeling! We start in Brazil -

where as you have been hearing the Rio 2016 Olympic Games will open

in just a few hours time. But it's not just a big

moment for sport - it's a lucrative

money-making operation too. Rio is set to be the biggest

money Games on record. Let's put it in some context

for you. Back in 2008

the Beijing Olympics pulled in broadcast rights and corporate

sponsorship worth almost That figure was blown

away four years later Now -

the final figures for Rio 2016 are not in yet but it looks

set to top $9.3 billion in commercial rights -

making it the richest Games ever. That's despite a barrage

of negative publicity - from political and economic

crisis in Brazil - to the Zika virus outbreak -

to the doping scandal overshadowing One of the companies investing

heavily in Rio 2016 is car It is a major sponsor of the Torch

relay, and it's CEO, He has been speaking

to our South American business correspondent Daniel Gallas

about paying so much Without any doubt it is the right

decision because the objective from the beginning was to give more

awareness to the Nissan brand. At the moment we are starting our

offensive in the country and Latin America. The fact that we took this

decision when the market was nearly 3.6 million cars a year and it is

now nearer to 2 million cars a year does not change anything that we

want to build a much higher awareness of our brand and product

in a country which without any doubt will continue to be one of the major

markets in the world and where our awareness is still behind some of

the top players. It does not change anything, the fact that the market

is down and hopefully in two or three years down the road it will be

much higher. It is one of the things we were expecting. Awareness is the

reason for which we are participating in the Olympics. The

Olic it is with tell us why you think this will be

the biggest moneyspinner we have seen. The Olympics is a unique

product coming round every four years. You get the Winter Olympics

in the middle which is an added bonus on that TV package! Is it a

sporting festival, people all around the world are watching it, the

television audience is something like 3.5 billion and sponsors want

to be involved and there are a limited number of positions so they

paid top bucks. I don't know if we know yet how much cost Brazil to put

it on but if it brings in $9.3 billion, does a lot of that end up

in the Brazilian economy or not? Most of it doesn't. What happens to

the sponsorship and TV broadcasting rights revenue, they go to the

International Olympic Committee. About 10% of that is used to pay for

the IOC itself including the nice hotel that the president lives in!

The rest goes down to the National sporting federations and

international adoration and in theory to the athletes but by then

it is quite diluted. As far as the host country is concerned, they are

meant to make their money back through local sponsorship like the

torch relay and getting tourists in. Rio is a good destination anyway and

it is ebbing for a bonanza from the Olympics but the government has to

pay a lot of money and in the case of London, the total cost was

somewhere in the region of $12 billion which is a lot money to

back. We're not sure how much this will have cost them but we note that

when they bid for this in the first place, the Brazilian economy was in

a completely different place and since then, whatever the cost, we

know it has spiralled, up by 50% and construction has been very difficult

to get it on time so I wonder if Brazilians might be thinking if we

really need this at a time when the economy is in crisis. That is always

the risk with in an Olympics, you bid for it with great hope years in

advance and everybody is very enthusiastic. It falls in a

recession like this, it can be rather unfortunate. You have to look

back at Athens 12 years ago to see that a lot of money was spent on

infrastructure, it did not seem to benefit their economy very much and

many of the venues were left to become derelict. The New York Times

has an article about that, whether the spirit has gone and the recent

study amongst Brazilians, 60% or study amongst Brazilians, 60% or

more don't support it. Thank you. Apple is going to start offering

rewards for finding security flaws. It will pay hackers

$200,000 if they find They're not the only

ones doing this. AT, Facebook, Google, Microsoft,

Tesla Motors and Yahoo In fact, in March, Facebook paid

$10,000 to a 10-year-old boy in Finland who found a way

to delete user comments New York State's financial

regulator has requested a meeting with Goldman Sachs

about its fundraising for Malaysian That's according to anonymous

sources cited by The Wall Street giant's work

with 1MDB is under the spotlight after a series of international

investigations into the fund. The number of people in the UK

being hired for permanent jobs has fallen by the fastest rate

for seven years. The BOE forecast this week

that the unemployment rate will rise to 5.6% from 4.9% over

the next two years. In the last few months we have had a

lot of comments about the RBS share price and we will have more on that

later but there have been big falls and we have already seen that the

share price is falling. And a bit from William Hill, gambling

companies are doing well. This is William Hill which is a big gambling

house here and its pre-tax profits jumped 28%. I am a bit sensible

about it but it was the football, nobody was expecting that result.

People made some big money. Yesterday, the Japanese carmaker

Toyota reported a 15% The BBC's Tim McDonald has been

looking at how investors reacted I don't imagine they liked it. You

would think that, a 15% drop in profits does not sound good but

their shares went up initially 3.2%. It is all about expectations and

this time round to it were predicting $5.4 billion which is

more than many people were tipping. They have been softening up

investors since the last quarter saying that the land cruiser has

left the motorway and things might be bumpier and that is down to a

stronger yen which has gained about 16% against the dollar in the first

top of the year. A lot of Toyota cars are made in Japan and a lot

head overseas where a stronger yen makes them more expensive and cut

into the valley of the earnings that come back to Japan. It is still a

profitable company and investors today did not think they were

looking at a car crash. That is always a surprise! Have a great

weekend. Most Asian stock markets rose

on Friday after the Bank of England launched a larger-than-expected

post-Brexit stimulus package that An overnight rally in crude oil

prices also sharpened investors' risk appetite,

but caution before those big US jobs We were expecting about 180,000 new

jobs to be created for the month of July.

The BoE said it would take "whatever action is necessary"

to achieve stability in the wake of Britain's vote

I mentioned the US. Let's find out what will be making the headlines.

about what's ahead on Wall Street Today.

From now until November anything that refers to the strength of the

US economy, you can expect it will be fodder for the American

presidential elections so if Friday's jobs report is weak we can

expect that the Republican candidate will say that this country needs

change and it needs Donald Trump. If the jobs report is strong, you can

expect that Democrats will say that the economy is getting better

because of Democrat and you should vote Clinton. So what can we expect?

Many economists believe that the jobs report will show that the

labour market is healthy and that the unemployed rate may fall even

further and that wages will increase ever so slightly. That is what the

US Federal Reserve will be looking at when it considers whether it

should raise US interest rates. Let's start with this jobs data. In

a way, the number is not as important as what happens to wages

because that is what they will be looking at. It is very much a

combination effect so we have to see what the headline employment number

is and the markets assume it will be a bit below 200,000 but if it was

above that then it might cause the market to row back a little bit from

the post-GDP reaction we saw last Friday. If we see average earnings

higher, and a reasonable headline figure, we might see a market coming

back to thinking, is the Fed still in play? If we get a good jobs

number given what you have mentioned with the weaker growth from the US,

we will all still be confused. Will they or won't they? Not long ago

they were still saying two rises by the end of the year. We are in a

scenario where the Federal Reserve are finding it easy to find reasons

not to hike rates. The post-Brexit world has added to the uncertainty.

If we see the deployment market remaining relatively robust, which

has an impact into consumption over time, that still leaves the

possibility of a rate hike before the end of the year, probably after

the election. And if that is the case, that might have an impact in

terms of how the US dollar trades and also into the broader market

actives and risk appetite. Thank you. You will be coming back later

to go through the papers. We will be talking the tunnel into Harrods! Not

for you and me! Still to come, I was dog moved from the Bank of England,

we will assess what the rate cut means for the British and world

economies. The you are with Business Live from

BBC News. The big story in the UK, the Royal Bank of Scotland, which is

largely owned by taxpayers as revealed it has made a huge loss of

about ?2 billion of the year. ?2 billion in six months. A bigger loss

than the city expected and RBS's chief executive Ross McEwan blamed

legacy issues which he said were still being sorted out. Let's go to

the news room because Sebastien Crispin joins us. Just how bad? 2

billion sounds a lot, but how bad in the grand scheme of the numbers?

Fair to say it's a disappointing set of results per Royal Bank of

Scotland. The ?2 billion lost the first half of 2016, let's compare to

the same period in 2015. The bank reported a ?179 million loss so the

difference between then and now is significant. On top of that, the

Royal Bank of Scotland is saddled with 1.3 billion of conduct and

litigation costs. And it means the bank is spending a lot of money

funding of legal actions and says the staff behaved inappropriately.

Not a good set of results and the falling share price is a testament

to that. The boss, Ross McEwan, is about half way through a big

restructuring plan in the company. What now for RBS? How can it

progress through the restructure? Important to take a step back and

know that this is not a good time for banks in general. We have seen

banking stocks rocked over recent weeks and a string of disappointing

results coming out the sector. On top of that we had the results from

the EU stress test which was an exercise by regulators to test the

resilience of the banking sector and a lot of banks, including RBS, did

not do well. It's a difficult time generally for banks. RBS is in a

difficult situation. In 2008, it was bailed out by the government and is

73% owned by the taxpayer, so it's in a particularly tough situation

and it's having to rethink the strategy of going forward. Great

stuff, we appreciate it. We will talk to you again. His first time

with us. He was good, wasn't he? One more story, this is Beltway, the

house-builder and it says it expects housing revenue to increase by 27%

with a bar saying it's too early to assess the effect of the EU

referendum result. But he says it's been encouraging trading. A very

robust balance sheet, he says. Go on, I was going to do it. You are

watching Business Live, and Rio is said to be the biggest money games

in history ever, despite the barrage of negative muscle that publicity.

The opening Seredina -- in the opening ceremony is happening at

midnight, a great time per us UK. You can go out Friday night, come

back and watch it. I might go out and drink and not remember it. Let's

have a look at the markets. Reassured, I guess about the Bank of

England move in some ways. Yes, a little bit and the falling value of

sterling against the dollar will lift the FTSE 100 because so many of

those companies are listed there and they make their profits outside of

the UK so it boosts the value. When they bring the money back in the UK

they get more bang for their buck. OK. In the last 24 hours the boss of

the Bank of England Mark Carney launched a huge fiscal programme to

stave off a Brexit induced recession, so what have they done?

We know interest rates have been cut from 0.5% to a quarter of a percent.

It is the lowest interest rate in history, its 322 year history and

the first that we have seen in seven years. So to make sure that the cut

is passed on, the bank has introduced a funding scheme. You

might be asking what that is. With the rates now so low banks are going

to find it harder to make money off the difference between the rate at

which they offer borrowers and savings, so as we saw in 2008, weak

banks are bad news the economy. This scheme will allow banks to borrow

money on the Bank of England at a lower rate than they would offer

savers for the same cash. One would imagine it will be near 0.25%. You

would hope. The central bank will also increase its quantitative

easing programme which basically means it's going to be creating this

electronic money and will buy up debt to the tune of $70 billion

which works out at around ?70 billion, $90 billion. We have Duncan

Withers, who is the head of the Resolution group. Good to see you.

Let's start with the idea of the new quantitative easing and corporate

bonds. It is clearly a favourite tool for the banks to tackle

lacklustre growth across the world. There is a lot of scepticism, given

the cost of borrowing at the moment that these measures will have any

impact. These were new moves from the Bank of England but similar

something that the European Central Bank did earlier this year. And this

is the global story at the moment. We are seven years into a recovery

of recession around the world and it's been a weak recovery and we are

relying more on Central banks to keep it going and they are doing

more and more extraordinary things. In some central banks you have a

negative interest rates. The boss of the Bank of England does not like

that. He said that a few times. Here is the thing, with the quantitative

easing programmes we've seen here and in other countries, the whole

idea is to get the money out in the economy and it ends up to Mary Smith

and Joe Bloggs, but it doesn't end up to the right people. It ends up

in the stock markets. Some central banks have been open about this.

They are saying they are trying to boost the price of financial assets

and that helps the economy in two ways. It makes it easier for

companies to raise money and that the holders of the assets feel

better off and go out and spend more. That's a way of stimulating

the economy but boosting asset prices as a distributional

consequence and in simple terms, it benefits people who hold assets, who

are already richer. They could be holding them in pension funds,

stocks and shares, and I want to ask you whether these programmes we are

seeing like quantitive easing really go to address the underlying

structural issues we have got in the global economy and whether or not

instead they make it more attractive to make excessive risks. There is an

issue there. Central banks why not also save assets are pushed the

price of those up and it means the return on them is low so investors

around the world have been forced to buy more risky stuff than normal.

That is what central banks are trying to do, push money into risky

assets to get the economy moving. There is a potential downside

because people are running more risk than they want to be. I think we

have relied very heavily on monetary policy and it might start to change.

We have seen Canada under a new government spending more. Japan has

launched fiscal stimulus. We might get a fiscal stimulus in Britain and

there may be a shift under way in the world towards more government

spending and less reliance on central banks. Duncan, thank you for

coming in and taking us through it. In a moment we will be taking a look

at the business but here's a reminder of how to get in touch. The

Business Live pages where you can stay ahead with all the breaking

business news. We will keep you up-to-date with insight and analysis

from the BBC team of editors around the world. And we want to hear from

you as well. Get involved on the Business Live web page. On twitter,

and you can find us on Facebook at BBC business news. Business Live on

TV and online whenever you need to know. Jeremy is back in the chair

and we will. -- we will crack on with the story of the retirement

home in London which is planning a tunnel from it to the Harrods

department store. It shows you where the level of wealth is. In the

context of your previous discussion, those with assets benefiting from

the QA process, the older generation are those that generally have higher

levels of assets. They clearly have greater levels of wealth and are

trying to tap into this by the tunnel into the shop. Older

generations are also savers, and what we see with a cut in interest

rates, already they are dismal and they will be moored dismal, saving

rates. They will continue to go down, so the by-product is that

hopefully that will encourage to spend because you are getting less

of return on your funds but your funds are actually going down in

real terms because inflation will go up because of the fall in sterling.

The idea is to encourage a bit more spending which just means the

economy will be even more unbalanced. We are expecting to hear

about the credit rating of Turkey from Moody 's. Extraordinary that

investors are rushing to Turkey despite what we heard about what is

going on. In the short term, because investors find it difficult to get

returns in other markets you have these episodes where you see a great

deal of uncertainty and markets move and then you get this rush of

investors moving back in. You try and get the returning Turkey and the

nominal yields are approaching nine or 10% but that is something we

don't see elsewhere. That is true. So a chance to make some money. As

long as you get there quickly enough. Thanks, Jeremy, have a great

weekend. That is it from Business Live. Plenty more throughout the

day. See you soon. Today is looking warm across the

board, mainly because we have lost the strong winds of